India chemical plant plans 10 mln tonnes CO2 sales

LONDON, Oct 10 (Reuters) Indian chemical plant Gujarat Fluorochemicals wants to sell 10 million tonnes of carbon credits between now and 2012 under a Kyoto Protocol carbon trading tool, its head of corporate finance said.

The Kyoto Protocol allows rich countries to meet their greenhouse gas emissions targets by funding pollution cuts in developing countries in units of carbon dioxide equivalent.

The scheme is transforming the fortunes of some sellers.

Gujarat Fluorochemicals has calculated a worst-case average price for all its carbon credit sales until 2012 of 12 euros per tonne.

This is based on the minimum price for the 40 million tonnes it has already sold and assuming it will get nothing for the remaining 10 million tonnes, Deepak Asher told Reuters on Tuesday.

Such a price implies sales so far of at least 480 million euros (3.4 million).

Of the total 50 million tonnes cuts expected by 2012, it will sell the remaining 10 million tonnes as the pollution reductions are made and carbon credits issued, and when the price is right.

''I wouldn't sell in the spot market now because the price is too low. I may sell that (10 million tonnes) depending on the price. Eighteen euros (.63) might be an interesting price,'' he said on the sidelines of a conference in London sponsored by the journal Environmental Finance.

Carbon for guaranteed 2008 delivery under the Kyoto pact -- termed Certified Emission Reduction (CER) units -- is trading at between 13 and 13.5 euros per tonne, one broker said on Tuesday.

Gujarat Fluorochemicals has cornered one-fifth of the world's total supply so far of physically produced carbon credits -- 2.9 million tonnes versus a global total of 16.5 million.

This total is a very small fraction of a present global project pipeline which could deliver some 1.2 billion tonnes of emissions cuts by 2012, according to the U.N. climate change body.

The 40 million tonnes Gujarat Fluorochemicals has already sold, to some 20 buyers, was in two batches: 25 million tonnes for guaranteed delivery and the rest non-guaranteed, at a fixed and floating price respectively, Asher said.

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